Teachers' Pensions - given up trying to understand.

frugal90

I am sure that jem16 will know the answer to this question.
Where do I find the table of historic cpi increases which are applied to calculate a teachers pension -the last three years in 10. The figures below are from the office for national stats.
I believe that the Sept figure is applied the following year on the first Mon after April 5th. What I need to know is when the figure of 3.6% from 2008 will drop out of that calculation as it could make quite a difference to my settlement.
In other words what would be the latest that I could work and keep this figure in? would it be April 5th 2018 or 2019??
2005 2.1
2006 2.3
2007 2.3
2008 3.6
2009 2.2
2010 3.3
2011 4.5
2012 2.8
2013 2.6
2014 1.5

LHW99

One further add-in to TP calculations:

Even when I received my statement of pension at retirement at age 60, the dependent's pension part was wrong. Worth going through the figures you get and comparing with your own records of length of service, extra payments made.

When pointed out, I was told that the calculation had to be done manually, and I waited several months after the pension was in payment to get a revised letter with the correct numbers.

jem16

frugal90 wrote: »

Where do I find the table of historic cpi increases which are applied to calculate a teachers pension -the last three years in 10. The figures below are from the office for national stats.

Those figures appear slightly out from the figures I have. For example September 2011 should be 5.2% and not 4.5%.

These figures match mine;

http://www3.hants.gov.uk/finance/retailpricesindexandconsumerpriceindex.htm

Click on Monthly CPI figures 1998 - 2014.

I believe that the Sept figure is applied the following year on the first Mon after April 5th.

Correct - September 2011 figures will be used to calculate pensions between April 2012 and March 2013.

What I need to know is when the figure of 3.6% from 2008 will drop out of that calculation as it could make quite a difference to my settlement.

Well September 2008 figure would have been used from April 2009 to 2010

In other words what would be the latest that I could work and keep this figure in? would it be April 5th 2018 or 2019??

I would think April 2018 to March 2019 retirals.

I do have a spreadsheet that works this out although you would need to hazard a guess at what CPI might be going forward. It also uses the Scottish salaries.

Grexit

Jem16

From reading many of your previous posts, it seems that you are the go-to source for information on teacher pensions. Would you be able to provide a copy of your spreadsheet for calculating pensionable salary over the best three consecutive years in the last decade?

Thanks

Grexit

jem16

Grexit wrote: »

Jem16

From reading many of your previous posts, it seems that you are the go-to source for information on teacher pensions. Would you be able to provide a copy of your spreadsheet for calculating pensionable salary over the best three consecutive years in the last decade?

Thanks

Grexit

I'm happy to so long as you're aware it's based on the Scottish salaries. You can of course substitute your own if you know them.

PM me you email address if you still want it.

System

And these people are teachers?

University Graduates possibly?

Obviously struggle with paperwork.

The scheme seems so simple...

Your leave date
Your start date

Take one date from the other
31 march 2014 leave date
05 june 1976 start date

Give a period of 37 years and 298 days-ish.

So as it is an 80ths scheme you divide by 80
298/365 = 0.816538 add on the years 37.816538
37.816538 / 80 = 0.472707-ish which is 47.2707 % of your salary.

Your employer supplies the pay figures to the TPS and you multiply by that.
Also if you get a 3/80 lump sum it is 3 times the annual pension.

###########

Then move on to anything else that is involved.

kidmugsy

And next week someone will start a thread to argue that what pensions need is that the kiddywinkies be taught about them at school.

facade

What I'm trying to decide is whether to leave the TPS.
If I do that, I stop giving them money, and also fix my best 3 years.

I'm 55, working 0.6 and on the 80ths scheme, so every year I work increases my pension by 0.75% of the magic figure.
But, my magic figure was in a time when we had Proper Inflation.
Now "They" claim there is virtually zero inflation, each year I contribute I'm swapping a year with a cpi increase of 2-4% (3.8% in 2008) for one much lower, and the 0.75% of my own toil.

Unless I completely misunderstand, leaving the TPS fixes my best final salary years at 2006, 2007, 2008, and calculates the CPI for every year since then, including years I'm not a member, ie from now, so I will gain by paying nothing and lose by contributing!

I can then put the massive contributions into an ISA, or AVC or something.

Have I missed anything?

saver861

facade wrote: »

Unless I completely misunderstand, leaving the TPS fixes my best final salary years at 2006, 2007, 2008, and calculates the CPI for every year since then, including years I'm not a member, ie from now, so I will gain by paying nothing and lose by contributing!

Not sure if I have fully got you but I'm missing the logic of your argument. You will be gaining on tax relief for starters.

Your pension will be assessed on the best of, final year, last three years or best three consecutive from the last thirteen.

So for example, if you took a lesser position and salary cut, you would still pay pension on that reduced salary. However, your pension would be assessed from the best of three consecutive years of the last thirteen. You would in fact be gaining as you would be paying less contributions but getting the pension from the the time at the higher rate.

Of course CARE will change that over time but it depends on when you would be retiring.

facade

My contributions increase my pension by 0.75% of my magic salary figure per year.
Each year that I work moves the magic salary year 1 year along.
10 years ago inflation and therefore the cpi was a lot more than 0.75% + the current cpi.
So each year I increase my pension by a smaller percentage than the cpi for the year that I have crossed off.
Also if I stop contributing, then I think cpi applies continuously across all the years. (This is what I need to find out)

My best salary years are 2006,2007 &2008, because they are compounded by the large cpi from those years. (Remember, the "pay rise" has been way below cpi for many years now)

If I leave the TPS for 5 years before claiming my pension, I should have 15 years of cpi compounded and applied to my salary from 2006 which forms the base figure for my pension.

If I stay in, I get 10 years of cpi compounded applied to my 2011 salary, the last 7 or 8 of which are very low, but I increase it myself by 0.75% a year = 3.75% overall.

So unless there is something wrong with either my maths, or my understanding of the way the base figure is calculated I reckon I will gain by leaving which freezes my service and compounds the cpi for 5 years longer including 5 "better" years.

If I buy AVCs or something I will still get the tax relief, and have "extra" pension.